local media insider

How to compensate telesales


This aggressively structured compensation plan for part-time telesales people is roughly modeled after the one used by Todd Handy, Director New Media, Deseret Digital Media. The concept is to start with an hourly, part-time rate, and then use bonus to double that, only if the sales person meets goal. A multiplier is used to scale the percentage of the bonus so that it is smaller under 100% and greater over 100%, with no bonus at 80% or less.

1. Hourly part-time
The hourly rate is $13 to $15 commiserate with market rates that are
considered good for the area.

2. Bonus plan
Telesales team members can make double the original amount, based on
performance against sales quotas. For example, at an hourly rate of
$13, the bonus plan can be  set at $15,720 ($1,310 per month).  Each
Media Sales Consultant has sales quotas per month preset for the
year, and summing up to an annual goal. Pre-setting goals for the year
ensures that top performing reps are not penalized by raising their
goals higher every month.  Achievement against goal is calculated as a
percentage, which is applied against the $1,310 bonus available per
month using the multipliers.

For example:

% of monthly goal      Payout    Multiplier

<80%                        0%
81-90%                     80-90%        .8

91-95%                     90-95%        .9

96-105%                   95-105%        1

106-130%                 106-130%       1.2

>131%                    Actual %          1.3

Given a monthly revenue goal of $22,000:

$15K revenue achievement = $0 bonus.  At less than 80% of goal, the  first month
“job is in jeopardy”.  Second month may be termination of employment.

$21K revenue achievement = 95% of goal.  With multiplier, 95%x.9=

$25K revenue achievement = 114% of goal.  With multiplier, 114%x1.2 =
137% x$1310

$29K revenue achievement- 132% of goal.  With multiplier, 158% x$1310.

Top reps can earn $40,000 to $50,000 a year part-time, and top out at about $70,000 on this plan. Sales for stable reps in a plan such as this are in the $15,000 to $23,000 a month range. 

Many thanks to Todd Handy, Director New Media Sales,  for sharing his compensation theories with us.



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